Winnebago County takes second look at parking price

ROCKFORD - Winnebago County has commissioned a second appraisal of a downtown parking lot that indicates its initial $950,000 offer was a fitting price.

A controversial proposal to buy the lot at Church and Chestnut streets was OK'd by the Winnebago County Board in September. Board members chose to reexamine the offer after a Register Star story showed the property had a fair market value of $175,000 before the former Hawk's Nest restaurant on the site was torn down to make way for 68 parking spaces.

County Board Chairman Scott Christiansen requested a second opinion from another appraisal firm. The new appraisal, by Davidson & Associates, states the property would be worth $838,000 as a commercial parking lot. That's about $88,000 more than the initial appraisal performed by Real Property Consultants.

The property is worth more to Winnebago County as an investment that would curb its long-term costs to lease parking, according to the new appraisal. It states the investment value to Winnebago County is $1,037,000.

The new appraisal, like the last, was based on hypothetical conditions. Specifically, what the commercial value would be if space were leased at current city rates with an additional rental agreement from BMO. A direct sales comparison wasn't done due to "the profound lack of land sale data in the downtown market."

Christiansen said the appraisals illustrate the dire need for downtown parking, which has been at a premium since the city shut down a portion of its concourse parking deck in June 2012. The city eliminated access to about 370 parking spaces adjoined to the BMO Harris Bank Center because of structural issues at the deck. The county is bound by its union labor contracts to provide parking to employees and had been previously leasing space at the concourse deck.

Christiansen said the purchase makes fiscal sense because debt payments the county would incur to buy the lot are equal to the cost of leasing parking, considering a tentative agreement the county has with BMO Harris Bank Center to lease the lot for $30,000 a year during concerts and other events.

The cost to lease parking from the city will rise next year, Christiansen said, and it's safe to assume that trend will continue in the coming years. The county would essentially fix its parking costs by owning its own space rather than renting, he said.

County Board members still need to revisit whether to purchase the property. A vote isn't scheduled at this time.

County Board member Ted Biondo, R-20, said the purchase makes sense for Winnebago County's bottom line, but he questions the initial agreement because the $950,000 price was based on an appraised value of $750,000 plus another $200,000 to compensate the owners for tearing down the former restaurant and building a parking lot. That means the county essentially paid the owners to make their property more valuable, Biondo said.

The former restaurant at Church and Chestnut streets was purchased through two transactions in 2005 totaling $630,000. The ownership group, Church and Chestnut Development LLC, made additional improvements to open what was Hawk's Nest restaurant. The group is managed by former Winnebago County Sheriff Don Gasparini, attorney Paul S. Nicolosi and Scandroli Construction owner Carl Scandroli, all of whom have donated campaign funds to Christiansen.

Biondo said board members didn't know who owned the property when they originally approved the purchase. He said that won't be a factor as he decides whether to reconsider the deal.

"I don't know what my decision will be, but it will be based on a number of financial issues, not who owns the place," Biondo said.

Supervisor of Assessments Tom Walsh sent a letter to board members in response to numerous questions he received about the initial appraisal. In the letter, he essentially warns them against comparing property tax assessments and real estate appraisals. An assessment is simply based on the fair sales of similar properties during the past three years. An appraisal determines the value of a site to a specific investor.

"Properties are not worth the same amount to all investors. Appraisals for investment value should, therefore, be considered an analysis of future benefits for a specific investor," Walsh's letter reads.

Christiansen said downtown parking is still a work in progress. The county may collaborate with the city, Rockford Park District and federal government, which has its own courthouse downtown, for joint parking needs.